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Overcoming the UK £120bn Skills Gap: Smart Data Vision Paper

Blog post Mar 24

In a nutshell

It’s a cliché that we live in a knowledge economy where skills drive productivity and growth. But we under-manage skills to a surprisingly large extent. Consider the UK.

By 2030 there will be a gap of 2.5 million skilled workers and an oversupply of 8.1 million unskilled workers. In the important STEM sector alone, the skills gap is 173,000 skilled workers; that’s an average of 10 unfilled roles per business. In aggregate, skills imbalance will cost the UK economy £120 billion.[1]

The UK Data Protection and Digital Information (DPDI) Bill, 2024 is a key legislative moment for national skills development. Due to be enacted in the Spring, the Act will create a public infrastructure that unlocks data to up-skill, cross-skill and nudge new entrants across entire national workforces.

Foreshadowing the UK opportunity, Singapore’s MyFutureSkills is a smart system that matches citizens’ skills, job aspirations, training and resources on a national basis.

In this article we consider the challenges of industrial skills development, how smart data and AI can be game changers, and how Ctrl-Shift can help industry and training sector players seize the opportunity created by the Act.

Understanding the skills gap

How does an advanced industrial economy like the UK develop a £120 billion skills gap?

An economist would say that the skills market is remarkably inefficient. Imperfect information and misaligned incentives are the key issues.

Consider misaligned incentives. Peter Capaldi, an actor in the long-running BBC series, ‘Doctor Who’, once declared that nobody should stay in a job longer than 3 years. In the UK, younger workers typically switch employer every 2.8 years. Across the US and UK workforce, average tenure with an employer is just 4 years.[2]

Consequently, although employers need a highly skilled national workforce, their incentive to develop the long-term skills of short-term workers is reduced. The UK Parliament recognised this problem as long ago as 1971 when it created the Industrial Training Boards.

Since then, the problem has been exacerbated by neck-snapping progress that creates new categories of job every few years; blockchain, vertical offshore farming and LLM software engineering are current examples.

For the economy to function workers will need to regenerate themselves as frequently as Capaldi’s famous ‘Doctor Who’ character. To its credit, the UK Government recently unveiled the Lifelong Learning Entitlement; a sort of student-loans-for-the-under-sixties mechanism to fuel lifelong learning. But that still leaves formidable barriers in place.

Firstly, mature learners often have complex lives and multiple responsibilities to juggle. This means solving equations about access, resources, logistics, benefits and support.

Secondly, career roadmaps are often fuzzy, obscure or emergent. Given an individual’s existing skills and experience profile it’s hard to discover the shortest path to the best opportunity for up-skilling or cross-skilling; especially when it involves a cross-sector move.

Lastly, there’s an inspiration gap. Critical sectors like engineering remain stubbornly unappealing, especially to younger people, women and minorities despite burgeoning opportunities. But the problem is not just, an inspiration gap. Eight major reports on STEM skills in as many years describe systemic skills market inefficiencies. Despite huge progress in schools’ engagement with employers, individual potential is not being efficiently matched with the right information, training opportunities, finance and support.

But there is a better way …

Towards an advanced and inclusive economy

Singapore's SkillsFuture movement promotes a culture of lifelong learning, helping Singaporeans adapt to a rapidly changing economy.

The vision is that the skills, passion and contributions of every individual will drive Singapore's next phase of development towards an advanced economy and inclusive society.

Part of this movement, ‘MySkillsFuture’ is a smart system that supports skills development and lifelong learning.

Using AI and 360 degree consented data, it offers a range of features and resources to help individuals understand and navigate their career paths, upgrade their skills, and remain competitive in the job market.

Key features of ‘MySkillsFuture’ include:

  • Skills and Career Guidance: Tools for career exploration and roadmapping.
  • SkillsFuture Credit: Credits for Singaporeans aged 25+ to fund approved courses.
  • Course Directory: Access to a diverse range of courses across industries.
  • Industry Insights: Data on in-demand skills to guide learning choices.
  • Personalized Recommendations: Tailored course suggestions based on interests and skill gaps.
  • Job Matching: Connects users to jobs matching their skills and experiences.

In the UK, imminent legislation lays the legal foundation for similar systems.

The UK Data Protection and Digital Information (DPDI) Bill, 2024

The UK aims to become the world’s “number one data destination” for unlocking value from responsible data sharing.

The UK Data Protection and Digital Information (DPDI) Bill, 2024 is a key legislative moment for national skills development. Expected to become law in Spring 2024, it will establish two key aspects of public data infrastructure in law: Smart Data and Digital Identity Verification.

As a business or citizen, Smart Data enables you to give explicit permission to trusted third parties to access, use and share your data. The UK’s Open Banking initiative demonstrates how this can transform a sector. Open Banking lets customers give authorised third party developers permission to access and share their banking data via an API. This has created a banking revolution of innovative FinTech services and £11 billion of value for the UK economy.

Supporting this, Digital Identity Verification creates re-usable digital identity with full legal force, that can be exchanged across companies.

The UK government envisages a sector-by-sector, and voluntary (with some exceptions) approach to the introduction of Smart Data. There is significant focus on making consumer markets work better; early candidates include the Energy and Transport sectors with others hot on their heals. In each case there is significant collaboration between government and industry.

How Ctrl-Shift Can Help

With the UK Government currently calling for ambitious and feasible solutions that harness Smart Data, Ctrl-Shift is well placed to assist. We have decades of experience in data driven strategy and innovation. Ctrl-Shift have partnered with MyWave (a tech firm) who created the AI, data and trust structure that power Singapore’s ‘MySkillsFuture’.

We offer:

  1. Expert consulting based on our heritage and close involvement with the development of Smart Data, Open Banking, Open Finance and working with bluechip brands such as BT, Barclays, JPMorgan, Suncorp, BBC, Facebook, Mastercard and Sainsburys.
  2. A rapid prototyping platform on which to rapidly define, test and deliver smart data solutions. The platform includes components for individual skills records management, generative AI to infer smart career roadmaps and digital data capabilities to unlock value from large and diverse data sets.

Who We Are

  • Ctrl-Shift is a strategy and innovation consultancy. Our purpose is to create sustainable growth from the use of personal data. We advise businesses on sustainable value creation. We advise governments on the design of data markets to enable economic growth and positive social outcomes by empowering individuals with their data.
  • Liz Brandt is Cofounder and CEO of Ctrl-Shift, a consulting firm which ****helps businesses and governments thrive in the personal information economy. As a subject matter expert, Liz has helped shape the development of the UK Data Protection and Digital Information (DPDI) Bill
  • Simon Kirby is a Ctrl-Shift Associate and was the Chief Information Officer of the Engineering Construction Industry Training Board (ECITB). At ECITB he drove technology-enabled learning solutions; Simon has a twenty year pedigree in digital and data-driven transformation.

Further Reading

The UK Public Infrastructure Opportunity

Data Mobility: The data portability growth opportunity for the UK economy